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Chancellor and business secretary Sajid Javid impose housing on councils without local plans

Chancellor George Osborne and business secretary Sajid Javid have set out plans to rip up planning rules on brownfield land to give developers “automatic permission” to build on previously used sites.

In moves which have already been warmly welcomed by housebuilders, Javid said the government will take on councils which haven’t drawn up local plans – giving the government the power to impose a plan for housing on councils without one.

The changes are part of a far-reaching plan published this morning to boost the UK’s economic productivity, which also sets out a roadmap for government policy across a raft of areas including skills, transport, energy and financial services.

In a further blow to the social housing sector, which was hit this week by a proposal to force landlords to decrease rents over the course of the parliament, the plan says housing budgets will be “re-focused” at the forthcoming spending review to support low cost home-ownership rather than housing for rent.

The plan, called “Fixing the Foundations” also unveils a move to a “zonal” planning system for brownfield land, allowing sites included on the proposed register of brownfield land automatic “permission in principle” to be developed. Compulosry purchase powers will also be beefed up, with further proposals on exactly how this is done to be brought forward int he autumn.

In a speech at the site of the former Longbridge car plant in Birmingham, Javid said: “We’re going to introduce a new zonal system, which will effectively give automatic planning permission on suitable brownfield sites like the one behind me. We’ll make sure the homes that are needed get built – if a council fails to produce a suitable local plan, we’ll have it done it for them.”

The move to impose housing numbers on local authorities comes five years after former communities secretary Eric Pickles scrapped the former Labour government’s “Soviet tractor style top-down” regional plans which imposed housing numbers on local authorities. At the time Pickles described them as “a national disaster that robbed local people of their democratic voice, alienating them and entrenching opposition against new development.”

Councils will be required to “plan proactively” to create the government’s proposed “starter homes”, of which it has already set out a target to build 200,000 over the next five years. Every “reasonably sized” housing site will have to include a proportion of starter homes.

Stewart Baseley executive chairman of the Home Builders Federation welcomed the moves. He said: “The lack of available developable land and delays in the planning system are the biggest barrier to the country building the homes it needs. If the industry is to increase supply closer to the level needed we need more land to come through the system more quickly. Speeding up the rate at which planning applications on previously developed land are processed; and closing the gap between central government ambition and local authority performance is key.”

The British Property Federation has already said the plans could be hamstrung by the severe shortage of resources afflicting local planning departments. Melanie Leech, chief executive of the British Property Federation, said: “We are particularly pleased to see a commitment to bring forward brownfield land for redevelopemnt and also the focus on Local Plans, as the absence of such is a real block to local growth.

“In order for these changes to make a difference, however, we strongly urge government to begin a dialogue with both the public and private sectors on how to address the severe shortage of funds which is afflicting local planning departments. The private sector will need to play a part in helping to address this funds shortage, and this needs to be explored fully if we want these new measures to work.”

Osborne’s planning revolution

10 Jul 2015

“Britain has been incapable of building enough homes”.

We often criticise the politicians of all parties on this blog, but on this point we strongly agree with George Osborne. But will he have the measures necessary to tackle this chronic problem? The Chancellor has announced some striking planning reforms to get more homes built:

A “zonal” approach to brownfield land, with the assumption of planning permission.

A tougher approach to councils who drag their feet agreeing a Local Plan. Osborne says government will impose a Local Plan on them.

Reform to compulsory purchase will be brought forward in the autumn. This will make it easier for councils to bring derelict land into use where it has been held empty for years. The site next to Bristol Temple Meads station was derelict for 17 years before the council was able to bring it into use this year.

Allowing large housing developments within the Nationally Significant Infrastructure Projects (NSIP) regime – which allows faster planning. This could potentially use rising land values to part-fund infrastructure or affordable housing.

All of these reforms sound positive on face-value and were included in some form in the comprehensive plan we developed with KPMG for the current Parliament tobuild the homes we need. The Chancellor also announced more powers for the Mayors of London and Manchester and an interesting (for another blog!) plan to let Londoners extend their homes upwards.

But there are some big gaps in Osborne’s planning revolution which need to be filled.

First, it’s really important not just how many homes we build, but what sort of homes. The best evidence suggests we need 250,000 new homes per year of which 125,000 should be in ‘affordable’ tenures, like Social Rent, Shared Ownership and Rent to Buy. This is not just because that’s what is needed to provide safe, secure and affordable homes for the next generation. To deliver housebuilding to the scale of 250,000 homes it will require both the public and private sectors building together.

But today’s announcement has flagged that in the spending review, funding for house building will be focussed on ‘supporting low cost home ownership for first time buyers’. We support making homes more affordable for first time buyers, but if it comes at the expense of affordable housing across all tenures then it’s a clear step backwards. You don’t solve a housing affordability crisis by cutting funding for genuinely affordable homes.

Second: will allowing building on all this brownfield land benefit local communities or will it just benefit landowners? Giving planning permission for house building on a piece of industrial land in England raises its value by 1,240% (for farmland it’s 28,652%). That huge change in land value is because of the housing shortage.

It exists because house prices are so wildly expensive compared to other ways you can use land. So we face a choice when giving planning permission to landowners to build homes on their land. The extra value could all go to the landowner as a massive lottery-style windfall from the government. Or, some of it could be invested in the local community by using it to fund affordable housing, better homes and more infrastructure to relieve local pressure.

This is where zoning can come into its own. Councils could use zones to force developers to compete with one another on quality or affordability, rather than on land price. A council would zone a piece of brownfield land for development and then welcome bids for how it could be developed, ensuring that affordable housing and infrastructure are also included. The winning bid would be the best for the local area – not the one that can pay the most to the landowner. This would be best value for the government and drive competition in the market towards quality outcomes for consumers.

Third, forcing Local Plans on slow councils runs against the grain of localism. A better approach in some cases might be to allow city-regions (or county regions) to put together a strategic plan for the whole economic area, as is the case already with the London Plan. If a council drags its feet in taking on its share of the house building, then the government could intervene to force it to sign up to the plan agreed across the rest of the region. That way, the imposed plan is local – not dreamed up in Whitehall.

Overall, this plan represents some significant opportunities – but also risks. If it simply becomes a way to give huge sums of money to landowners and doesn’t get more affordable homes built, then Osborne’s planning revolution will fail to build enough of the type of homes we really need. We’ll be campaigning to make this plan as good as it can be.

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